> Sidenote: 3 is actually high.

Do you mean low? AAPL has a ps of 10.

The question on my mind is-is this IPO designed to rip off recreational passive investors and those of us that invest in retirement accounts?

According to their IPO S-1 draft they are 93% an AI company and 4% a space company. Its the remaining 3% of the company that is profitable, the Starlink stuff.

Maybe they'll become an AI company again after they've abused their privileged access as hardware providers to reverse-engineer Google and Anthropic's weights and operations.

Given the amount of compute rented I doubt there’s anything meaningful left for the people there to do any AI.

The profit center, to the extent any division makes money, is Starlink, yes, but what we have always known as SpaceX is just a tiny side project in the combined company.

I’m pretty sure he’s just trying to become the world’s first trillionaire at this point, these deals are obviously gimmicks to boost the SpaceX share price and his less-than-critical-thinking fanbase will happily oblige.

I am comparing SpaceX’s datacenter-and-GPU leasing business to aircraft leasing.

It’s possible, and common, for one large company to have multiple business lines, each worthy of a very different P/E multiplier. In principle you end up with a weighted average of some sort.

edit: Matt Levine has some great articles about this phenomenon and how some companies try to juice it.

'generational company'? Are you on drugs or so?

All of Musks business stuff highly depends on first mover advantage.

If people now selling it as a 'generational company' than it becomes even more stupid.

He didn't invent an unkown solution he is hiding to transform something into gold, he only put a lot of money into rockets.

And the rockets right now don't even have enough payload to have unlimited potential. If Space-X knows how to build a rocket very efficient, 10 years later other companies can do that too.

I would short xAI but the market can remain irrational longer than I can remain solvent. Plus all the foolishness to prop it up with other businesses just seems like bad accounting.

He can’t do with rockets what he says SpaceX has to do to meet its goals, and he isn’t raising enough money to get the job done either.

It’s another misdirection.

I don't think you can short it before the IPO happens. Well, unless you've got a few millions and go to a bank and have them make a product for you specifically. But for normal people, for now, not happening.

the problem:

The Nasdaq 100 and FTSE Russell made a rule change that allows SpaceX to enter index without mormal time for price discovery. Most index funds have rebalance day just 5 days after IPO. S&P also made rule change for S&P Total Market Index and Dow Jones US Total Stock Market Index, but left SP500 intact.

Nothing wrong with SpaceX or Anthropic getting into indexes with fair rules, this rule change is pure creed+corruption.

Are there really 10-100x undervalued companies listed on indexes that haven’t been noticed?

I don't understand this logic. Does whole market mean scamming companies too?

Also, there’s a long history of companies that people yell about being overvalued being the drivers of index returns, because one of the major drivers is growth rate, whereas retail investors tend to look mostly at current state.

A company can have poor fundamentals compared to its stock price, and also have an enormous P/E multiple if it has committed investors. We've seen this with multiple meme stocks and Tesla. I have no doubt SpaceX will fly high for a while and people will make a lot of money, but I don't think the company is going to make $320bn/year in AI services (with 74% profit) by 2030 as the S-1 suggests. At some point the market price will coincide with real earnings.

Trillionaire

> SpaceX could rise to be a major winner that makes people a lot of money

Based on "sane"/traditional metrics that and much more is already priced in into the IPO valuation.

e.g. Google had a many times lower P/S ratio at their IPO and was actually profitable (and software companies usually have higher valuations than capital intensive ones like SpaceX anyway). SpaceX is already valued at more than Google was 10 years after its IPO while barely making a tiny fraction of its revenue.

Alternatively you may want to be a passive investor using the current rules for index inclusion, rather than having them altered to favor this loss-making trashcan on fire.

OK, but SpaceX is not printing money out of thin air. And neither does the stock market. Somebody will be left holding the bag eventually.

The Facts: Tesla wasted billions for Cybertruck, hasn't had a new real model for years, promises Full Selfdriving without supervision for a decade and other companies are either on the same level or better.

xAI has such a shitty AI, that he makes more profit renting his Compute instead of making profit directly from it as the companies doing who have better AI then him.

Space-X is a limited business and he tries to make it unlimited by selling stories of Mars and dyson spheres (literaly), no one will ever finance or need as long as we have still desserts everywhere. In parallel his Starlink business gets competition left and right and despite this, he only has 10 Million customers AND increased prices for STarlink just last month or so.

And the payload, most payload increase is only Starlink. He has to sell us a story, that suddenly even with Starship, he can send so much payload up there to make Space-X this mega trillion company.

He can't even scale Starlink. Its expensive. The satelites work for 5 years and have limited capacity. He NEEDS Spaceship to be able to send up Starlink Server v3 and he hasn't even prooven he can get his ship back which he needs for the payload price.

Twitter/X? Yeah he tanked that one.

Optimus? When did you see the latest non faked demo? And while he works on it, we already have the market cornered here.

Well... AOL had rather extreme aspirations and a massively overvalued market cap during the internet boom as well.

So yes, ridiculous things like that happen and markets are very often not rational at all (short and medium term at least).

Nortel, Sun, AOL, Cisco were all very innovative and rapidly growing companies. Until reality kicked in.

See also: "The Madness of Crowds" On Wall Street,people think they are betting on the fin performance of Companies, when in fact you are betting on the crowd's perception of a company's performance.

Quite the abstraction.

The bet is that demand for AI tokens will continue to grow exponentially. And that SpaceX will be able to deploy and rent out GPUs to serve those tokens faster than anyone else.

The wrinkle is that they are planning to deploy those GPUs in space. That’s what people are most skeptical about, I think!

Google and friends continue to see increased demand for their wares. The bet is probably that SpaceX is one of the best-placed companies to deliver incremental compute. They've shown they can build data centers fast.

I rreally dislike how big corp figured out that the can sell stuff to each other without actually moving some good. Looking at you, Nvidia... I have a feeling that the ordinary people will again pay for that.

But they did need to shore up that p/e ratio. Got to assuage our inner Ben Graham.

SpaceX cannot report Google’s investment as revenue on its balance sheet. Full stop. Equity investments are reported as shareholder equity. If you don’t believe me, read FASB ASC 605-606, ask your friendly neighborhood CPA—or, perhaps so you’ll earn a valuable lesson about confidently spreading bullshit about subjects in which you are clearly uneducated (or, at best, superficially educated), try it yourself in a public company and go to jail.

You don’t know what you’re talking about and are way out of your lane. Stop now. In fact, you should retract your parent comment and apologize to the community for leading them astray.

Did you even try to ask even ChatGPT or Claude about this first?